Gold Slips On Fading Brexit Expectations
Growth Aces | Jun 21, 2016 07:10AM ET
Gold Slips On Fading Brexit Expectations
- Gold was down for a second session on Tuesday as Asian stocks extended a rally on growing expectations that Britain would opt to remain in the European Union in a referendum later this week. Better sentiment on global equities will likely continue to pressure gold unless the UK vote tightens once again.
- In our opinion spot gold may be under pressure in the coming sessions, but longer-term factors driving the gold demand are still intact. We think that gold could be a very good buying opportunity if it pulls back a little bit.
- Federal Reserve Chair Janet Yellen's testimony before the Senate Banking Committee starts later on Tuesday (14:00 GMT), and she may offer clues on the timing of the next US interest rate hike. The Fed kept interest rates unchanged near record lows and lowered its projections for hikes in 2017 and 2018 in June.
- Minneapolis Fed President Neel Kashkari said yesterday that a vote by Britain to leave the European Union could have "moderate direct effects" on the US economy, but probably does not pose big financial risks. He added: “My outlook is for continued moderate economic growth and inflation gradually returning to our 2% target.”
- Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding the precious metal.
FOREX - MAJOR PAIRS:
FOREX - MAJOR CROSSES:
PRECIOUS METALS:
It is usually reasonable to divide your portfolio into two parts: the core investment part and the satellite speculative part. The core part is the one you would want to make profit with in the long term thanks to the long-term trend in price changes. Such an approach is a clear investment as you are bound to keep your position opened for a considerable amount of time in order to realize the profit. The speculative part is quite the contrary. You would open a speculative position with short-term gains in your mind and with the awareness that even though potentially more profitable than investments, speculation is also way more risky. In typical circumstances investments should account for 60-90% of your portfolio, the rest being speculative positions. This way, you may enjoy a possibly higher rate of return than in the case of putting all of your money into investment positions and at the same time you may not have to be afraid of severe losses in the short-term.
How to read these tables?
1. Support/Resistance - three closest important support/resistance levels
2. Position/Trading Idea:
BUY/SELL - It means we are looking to open LONG/SHORT position at the Entry Price. If the order is filled we will set the suggested Target and Stop-loss level.
LONG/SHORT - It means we have already taken this position at the Entry Price and expect the rate to go up/down to the Target level.
3. Stop-Loss/Profit Locked In - Sometimes we move the stop-loss level above (in case of LONG) or below (in case of SHORT) the Entry price. This means that we have locked in profit on this position.
4. Risk Factor - green "*" means high level of confidence (low level of uncertainty), grey "**" means medium level of confidence, red "***" means low level of confidence (high level of uncertainty)
5. Position Size (forex)- position size suggested for a USD 10,000 trading account in mini lots. You can calculate your position size as follows: (your account size in USD / USD 10,000) * (our position size). You should always round the result down. For example, if the result was 2.671, your position size should be 2 mini lots. This would be a great tool for your risk management!
Position size (precious metals) - position size suggested for a USD 10,000 trading account in units. You can calculate your position size as follows: (your account size in USD / USD 10,000) * (our position size).
6. Profit/Loss on recently closed position (forex) - is the amount of pips we have earned/lost on recently closed position. The amount in USD is calculated on the assumption of suggested position size for USD 10,000 trading account.
Profit/Loss on recently closed position (precious metals) - is profit/loss we have earned/lost per unit on recently closed position. The amount in USD is calculated on the assumption of suggested position size for USD 10,000 trading account.
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Source: Growth Aces - Forex And Precious Metals Trading Signals
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